Taiyo Nippon Sanso Corporation (TNSC) will supply on-site gas to JFE Steel from October 2017 in a newly-formed joint venture (JV).

JFE Steel’s current air separation unit (ASU) production at its Nishi Nippon Steel Works in the Kurashiki District will be transferred to the JV scheme, to be called JFE Sanso Centre, with the investment of 60% from the Tier One organisation and 40% from JFE Steel.

Under this new agreement, JFE Steel will replace its old ASU with two new units, capable of producing approximately 60,000Nm3/h of oxygen (O2), whilst the Japanese industrial gas corporation will provide all the production facilities.

TNSC’s investment in the new gas supply equipment, including the cryogenic ASU, at the Kurashiki site is estimated to be around ¥20bn ($180m).

The steelmaking company currently has six units of cryogenic ASU equipment, with the oldest unit being more than 40 years old. The installation of the new equipment is expected to generate a more efficient production system.

It is understood that the steelmaker will continue to supply liquid O2, liquid nitrogen (N2), and liquid argon (Ar) to the region, even after the transfer to the new JV.

Leading the way

This contract will be the third of its kind to apply TNSC’s Sanso Centre JV system, following Keihin in the Kanagawa Prefecture, and Fukuyama in the Hiroshima Prefecture. In light of these regional experiences, JFE Steel is hoping this JV will enhance the business efficiency and empower competitiveness of the steel works.

TNSC established the Yawata Sanso Centre for the on-site gas supply to Yawata Steel Work, through a similar 50/50 investment with Nippon Steel and Sumitomo Metal Corporation, on 1st January, 2016. 

This reinforces the recent movement in which steel makers are transforming their production methods from gas consumption via an in-house style to an on-site supply system of JV style.

According to The Gas Review, this could be the first step for other domestic Japanese steelmakers to renew and upgrade aged facilities, in the interest of international competitiveness.